The launch of a new U.S. investment fund that plans to pay investors for buying the fund represents a new front in the war on asset management fees, says Moody’s Investors Service in a new report.

The rating agency reported that on May 13, the U.S. Securities and Exchange Commission (SEC) approved a proposal from New York-based Salt Financial LLC to effectively pay investors five basis points to hold its Low truBeta U.S. Market ETF until the fund hits US$100 million in assets under management (AUM) or until May 2020, whichever comes first.

“The fund’s launch is credit negative for asset managers because it furthers the relentless march towards fee compression in the fund industry,” it said.

Moody’s noted that while there have been several zero-fee funds launched in the U.S. in the past year, this will be the first-ever negative fee fund.

“Although we do not expect Salt’s product by itself to have a significant effect on flows into and out of ETFs and mutual funds, it will have an important psychological consequence: removing the theoretical lower bound of zero on management fees will strengthen the anchoring of ETF fees to around zero,” it said.

Moody’s said that it expects to see fees to continue their decline in the traditional asset management industry, adding, “these new product launches signal the desire by some asset managers to increase their relevance to investors at the expense of management fees.”

Additionally, Moody’s said the fund in question is a smart beta ETF, which is similar to an active fund, “a recognition that investors are further questioning the value of fees for active fund management and an indication of likely further fee compression in the smart beta segment in particular as well as active fund management fees more generally.”